Start a tutoring business

Start a tutoring business and a piece of that lucrative pie could be yours. But how do you do it? What do you need to know? And how can you increase your odds of success? Here are tips to help get you going.

1. Decide if a tutoring business is right for you

Before you take any steps toward launching your business, determine whether or not business ownership is your best path.

“Be brutally honest with yourself about your abilities,” suggests Jenn Cohen, owner of a Dallas-based SAT/ACT tutoring firm that specializes in LD/ADHD students. This includes not just your tutoring skills, but your ability to run a company, which may include bookkeeping, managing other tutors, marketing, advertising and providing customer service, such as dealing with customer complaints. You might be an amazing tutor, but do you have the business know-how to start your own company?

2. Pinpoint your niche

Tutoring is a very diverse business. What type of tutoring will you specialize in? Will you focus on younger kids, test prep, subject-specific tutoring, special needs students, etc.

3. Plan your budget

How much money will you need to cover all of your living expenses and business costs? If you plan to quit your day job to experience life as a tutoring entrepreneur, set aside money to cover at least three to six months of living expenses.

Cohen says, “Be prepared for a lot of ‘lean’ months, maybe years! Tutoring is largely a word-of-mouth business, and you will build your business slowly.”

You might also continue working while you launch your business, using your tutoring money to build a savings account to cover lean times that may arise when you’re ready to quit your job and run your business full-time.

Set up basic bookkeeping software, which will help you keep track of accounts payable and accounts receivable.

How to start a tutoring business

4. Do research

Invest time in market research and answer the following questions honestly to determine the likelihood of your tutoring business success.

  • What is the current market in my area or niche? Is there a need for what I do?
  • What are the start-up costs? Can I afford it?
  • How much can I charge? What will the market bear? Is that enough to be profitable?
  • Do I have, or can I obtain, the right materials and supplies?
  • Will I hire other tutors or do it all myself in the beginning? If I want to hire, where will I find tutors and what credentials will I require?
  • Will I work out of my home or do I need a physical business location?

5. Scope out the competition

What are the other tutoring businesses in your area? What do they specialize in? How are they run? How can you set yourself apart?

6. Choose a name

What will you call your new company? Ask other people’s opinions on the name. Search for the name in Google to make sure other companies aren’t already using it — you want to stand out!

7. Deal with financial and legal issues

Speak to your tax accountant about what kind of business structure is best for your company. “I formed an LLC (Limited Liability Corporation) to protect my family,” Clark says, “and I would highly recommend anyone entering the tutoring industry do the same.”

And also consult with a small business lawyer to find out about local ordinances, liability issues and other aspects of business ownership.

8. Create a marketing plan

How will local families find you? Word-of-mouth is often the best advertising strategy. Reach out to local schools, libraries and organizations, and tell them about your services, so they can then recommend them to parents.

According to Cohen, mailers and brochures haven’t worked very well for her, but she strongly advocates having an online presence and starting a blog. Offering tips and information about your services is a great way to show families that you’re an expert in your field.

“Build relationships via social media and become highly recommended. Build a brand that invests in the community, and the advertising will take care of itself,” Clark says.

9. Keep the parents in mind

While you will be working one-on-one with the kids, the parents are the ones you have to sell yourself to. Structure your offerings and pitch to them. Why should they hire you to tutor, over a different tutoring company?

And keep that relationship going beyond the initial hire. “You must offer great service that extends beyond tutoring sessions,” shares Cohen. Treat parents as friends and allies in the students’ education.”

10. Ask for help when you need it

Don’t be afraid to ask for help. Network, ask for advice and learn from other people. 

Organizations like the Small Business Administration, as well as networking groups like Lions Club International or Rotary Club, offer excellent resources for new business owners.

“I wish I knew how to ask for help a bit more in the beginning,” says Derek R. Henig, owner of Long Island, N.Y.-based tutoring service Roaming Scholars.

Plus, talking with people you know or meet can drum up business, he shares. “I’ve been working with some families for years, and it started by striking up a simple conversation at a bookstore.”

Start-up business owners often struggle, but if you invest the time and energy in the right ways, and provide exemplary service and fair prices, soon you’ll be the one offering advice to other tutors starting a company.

“To become a successful owner one must be able to connect dots,” shares Clark. “My success is greatly attributed to my ability to make connections. Successful business owners must also be willing to put themselves out there and become a leading voice in the industry. There is a lot of risk involved, but the reward is worth the risk.”